Construction equipment industry bets big on infrastructure spend

Construction equipment industry bets big on infrastructure spend
The Hindu Business Line, November 25, 2009, Page 15

Our Bureau, Bangalore

The construction equipment industry opened its showpiece event on Wednesday on the note that it was on a high-growth phase and would nearly treble to $15 billion (about Rs 75,000 crore) by 2015.

The growth was driven by the unprecedented public spend on infrastructure, Mr Vipin Sondhi, CEO of JCB India, and Chairman of the fifth two-yearly edition of EXCON, said.

The Union Minister for Road Transport, Mr Kamal Nath, said on the sidelines of the event that he would meet the the World Bank President, Mr Robert Zoellick, visiting on December 2, to discuss a $3-billion soft loan (nearly Rs 14,000 crore) for widening 6,300 km of national highways.

His Ministry had set a target of achieving 20 km of roads a day by March 2010, which would need Rs 2 lakh crore for 20,000 km of roads, Mr Nath said after inaugurating the event. The five-day trade fair is co-hosted by CII.

The domestic industry was a small part of the $100-billion global industry, However, all eyes are trained on us as the country is doing well economically, said Mr Ranaveer Sinha, Chairman, Indian Earth-moving & Construction Industry Association Ltd. India with its cost advantage, can also be the manufacturing base for equipment, components and design.

Mr Sinha said the construction equipment industry had to find solutions to reduce mishaps and emissions. “We have to move towards hybrids and battery operated vehicles,” Mr Sinha said.

Another issue was the import of used equipment, which needs to be regulated so that India “does not become a graveyard for yellow metal,” he said.

He said the huge Government investments in building infrastructure would drastically change the industry in the next decade.

Mr Sondhi said a year ago, this industry’s sales had plummeted 40 per cent during the third quarter, but had recovered sharply on Government stimulus.

This year, the event has grown 60 per cent in pavilion space to 1.6 lakh sqm and 55 per cent by participation to 456 exhibitors, Mr Sondhi said.

Mr C.R. Swaminathan, Chairman, CII-South, said the industry had entered a phase of quantum growth. With a work force of 31 million, it was the second largest employer after farming.